That’s no bubble, that’s my life

In “The bubble at the University of Minnesota” I took note of Charles Lane’s Washington Post column based on the reporting of the Wall Street Journal. The Journal reported startling data suggesting the incredible administrative bloat at the University of Minnesota. The Minneapolis Star Tribune republished Lane’s column with these choice facts and figures plucked from the Journal article:

At the University of Minnesota, the number of employees with “human resources” or “personnel” in their job titles has grown from 180 to 272 since the 2004-05 academic year. Since 2006, the university has spent $10 million on consultants for a vast new housing development that is decades from completion. It employs 139 people for marketing, promotions and communications. Some 81 administrators make $200,000 per year or more.

In the past decade, Minnesota’s administrative payroll has gone up three times as fast as the teaching payroll, and twice as fast as student enrollment.

Oh, and tuition more than doubled in that same period, to more than $13,000 per year.

These facts and figures, gleaned from a fascinating article in last weekend’s Wall Street Journal, are depressingly typical of American higher education, where administrative payrolls and other non-teaching costs have been growing rapidly — without any obvious commensurate benefit for students.

Lane also included a quotable quote from current university president Eric Kaler:

Minnesota’s president told the Journal his school’s doubling of “directors” at the Office of Equity and Diversity helped make the campus “more inclusive and more welcoming to people of different backgrounds.”

Having had a little more time to think about it, President Kaler would like to add a few comments. Today’s Star Tribune publishes Kaler’s counterpoint column:

Charles Lane’s “Let’s shove back at higher ed” (Jan. 3), about costs at public universities, summarized parts of a recent Wall Street Journal article about the University of Minnesota. The articles did not report that despite stunning state disinvestment, the university is more productive than at any time in recent history. The U serves nearly 9,000 more students today than it did in 2000, an increase of nearly 16 percent, and has reduced the per capita cost of educating students by 13 percent.

We have increased research grants and contracts by 40 percent. Private philanthropy, which directly benefits students, has grown to record levels. Students at the Twin Cities campus are graduating at rates nearly 43 percent higher than they did 16 years ago, and the rate at which the U retained first-year students into a second year on campus reached an all-time high of 91 percent in 2011.

Lane also took at face value the Journal’s analysis of administrative hiring at the university without providing the proper context. Growth of research (and attending to the myriad regulations associated with it), improving the student experience and managing complex technology all require staff who are classified as “administrative.” And many of those activities do benefit students directly. Our analysis shows that 9 percent of our budget is spent on administrative oversight, a level in line with many nonprofit organizations.

Finally, Lane criticizes a “vast new housing development” without mentioning that this 5,000-acre parcel owned by the university will be mined for gravel for decades and redeveloped, yielding millions dollars of revenue over time for the university.

I agree that reducing costs — including the cost of tuition — on U.S. campuses must be a priority as the historic shift away from state support of public higher education continues. In addition, enormous change is underway in all institutions, driven by technology, shifting politics and a different economy.

Solving these problems isn’t easy or fast, particularly at large, decentralized research universities. Institutions must standardize operations to a much greater degree and apply lessons learned from business. Higher education also must be more accountable to policymakers, business partners and, most importantly, students and their families.

Since I became president 18 months ago, reducing our administrative costs has been a top priority, and we’ve taken action. In my inaugural speech, I pledged to hold the line on administrative expenses, and we’ve made significant progress.

We have eliminated two major administrative offices, saving more than $2.2 million annually. We have saved $5.6 million in energy costs during the past three years. We were the first public higher-education institution nationwide to move faculty, staff and students to Google applications — increasing efficiency and avoiding $15 million a year in technology costs.

Finally, we kept tuition increases at a 12-year low of 3.5 percent last year and have made freezing undergraduate tuition at current rates for the next two years our highest priority.

Simultaneously, we have allocated $20 million for hiring additional faculty.

We know there is much more work to do. Tough choices lie ahead for all colleges and universities, public and private, but the conversation about tuition should be framed by facts in perspective — in Minnesota’s case, in the context of the loss of nearly $140 million in state aid since 2008.

I’m certain that Mr. Lane — a Yale Law School and Harvard College graduate with impressive professional credentials — understands the value that is at stake.

In my part of the professional world, this is what we might call “guilty with an explanation.”